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Untitled Flashcards Set

AQA A-Level Business: Budgeting

1. What is a Budget?

  • A budget is a financial plan that outlines expected revenues and expenditures over a specific period.

  • Used for planning, decision-making, and financial control.

2. Types of Budgets

  • Income Budget: Forecasts expected revenue from sales and other sources.

  • Expenditure Budget: Estimates business costs, including fixed and variable costs.

  • Profit Budget: Calculates expected profit (Revenue - Costs).

3. Importance of Budgeting

  • Helps in financial planning and control.

  • Prevents overspending.

  • Encourages efficiency.

  • Facilitates performance evaluation (variance analysis).

4. Methods of Budgeting

  • Historical Budgeting: Based on previous financial data.

  • Zero-Based Budgeting: Every expense must be justified from scratch.

  • Incremental Budgeting: Adjusts last year’s budget by a percentage.

5. Budgeting Process

  1. Set objectives: Define financial goals.

  2. Research market trends: Forecast sales and costs.

  3. Set departmental budgets: Allocate resources.

  4. Monitor performance: Use variance analysis to compare actual vs. budgeted figures.

  5. Make adjustments: Adapt to changes in revenue or costs.

6. Variance Analysis

  • Favourable Variance: Actual results better than budgeted (e.g., higher revenue or lower costs).

  • Adverse Variance: Actual results worse than budgeted (e.g., lower revenue or higher costs).

  • Causes of Variances: Market changes, economic factors, operational efficiency, unexpected costs.

7. Limitations of Budgeting

  • Relies on forecasts, which may be inaccurate.

  • Can be time-consuming.

  • May lead to short-term focus over long-term growth.

  • Unexpected external factors (inflation, competition) can impact effectiveness.

AQA A-Level Economics: Contestability

1. What is a Contestable Market?

  • A market where there are low barriers to entry and exit, meaning that new firms can easily enter and compete with existing firms.

  • The threat of "hit-and-run" entry keeps firms efficient, even if few firms exist.

2. Characteristics of Contestable Markets

  • Low barriers to entry & exit (e.g., no high sunk costs).

  • Low customer loyalty (so new firms can attract customers).

  • Access to technology and resources (so new firms can compete).

  • Lack of economies of scale advantages for incumbents.

3. Barriers to Contestability

  • High sunk costs (e.g., advertising, R&D).

  • Economies of scale (existing firms may have cost advantages).

  • Legal barriers (e.g., patents, regulations).

  • Brand loyalty (customers may stick to known brands).

  • Predatory Pricing (existing firms cut prices to drive out new entrants).

4. Implications for Market Behaviour

  • Even monopolies may act like competitive firms to avoid new competition.

  • Normal profits are more likely (since high profits attract new entrants).

  • Productive and allocative efficiency improve due to competition pressure.

5. Policies to Increase Contestability

  • Reducing licensing requirements.

  • Encouraging innovation and access to finance.

  • Breaking up monopolies or deregulating industries.

  • Tougher anti-competitive regulations.

6. Real-World Examples

  • Airline industry (easyJet vs British Airways).

  • Retail banking (new digital banks vs traditional banks).

  • Ride-sharing (Uber vs traditional taxis)—Uber entered the market easily due to low fixed costs.

AQA A-Level Media Studies: Newspapers

1. The Role of Newspapers

  • Informing the public about current events.

  • Shaping public opinion through editorials and biased reporting.

  • Acting as a watchdog against corruption and government power.

2. Types of Newspapers

  • Broadsheet (The Times, The Guardian) – Serious tone, formal language, focuses on politics & global issues.

  • Tabloid (The Sun, Daily Mirror) – Sensationalist, informal language, celebrity gossip, and entertainment.

  • Mid-market (Daily Mail, Daily Express) – A mix of serious and entertainment news.

3. Ownership and Control

  • UK newspapers are owned by large conglomerates (e.g., Rupert Murdoch’s News UK owns The Sun and The Times).

  • Concerns about bias – Owners may influence editorial stance.

  • Media plurality issue – Few companies own most media, reducing diverse viewpoints.

4. Regulation of Newspapers

  • IPSO (Independent Press Standards Organisation) regulates the press but is voluntary (not all newspapers follow).

  • Leveson Inquiry (2011) exposed unethical journalism (e.g., phone hacking scandal by News of the World).

5. Funding and Revenue Models

  • Advertising (Google & Facebook took over ad revenue, reducing print profits).

  • Subscriptions & Paywalls (e.g., The Times, The Guardian).

  • Government subsidies (some state-funded publications).

6. Influence of Digital Media

  • Decline of print newspapers due to free online news.

  • Rise of citizen journalism (social media, independent blogs).

  • Fake news & misinformation spreading online.

  • Algorithms & echo chambers – People see only news that aligns with their views.

7. Audience Theories Applied to Newspapers

  • Uses & Gratifications Theory (Blumler & Katz) – People choose news that suits their needs (e.g., information, entertainment, personal identity, social interaction).

  • Reception Theory (Stuart Hall) – Readers interpret news differently based on their background.

  • Hypodermic Needle Model – Media can inject ideas directly into a passive audience, influencing opinions.